RISK MANAGMENT.pdf

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3. RISK MANAGMENT
Risk Management is a process that identifies loss exposures
faced by an organization and selects the most appropriate
techniques for treating such exposures
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4. Process of risk management
The Risk Management Process is a clearly defined,
the method of understanding
what risks and opportunities are present,
how they could affect a project or organization,
and how to respond to them.

5. Process of risk management
Identify
the risk
Evaluate
the risk
Prioritize
the risk
Treat
the risk
Monitor
the risk

6. Identify the risk
The purpose of risk identification is to reveal what, where, when, why, and how
something could affect a company's ability to operate.
Listing the potential risk and its characteristics
For example;
Legal risks.
Environmental risks.
Market risks
Regulatory risks

7. Analyze the risk
Risk analysis is the process that figures out how likely risk will arise in a project.
 Two ways to analyze risk are quantitative and qualitative.
Quantitative risk analysis is a statistical analysis of the effect of those identified
risks on the overall project
Qualitative risk analysis is a risk assessment done by experts on those identified
risks on the overall project who uses the data of past projects .

8. Prioritize the risk
Risk prioritization is the process of identifying all the risks to a project and then
deciding which ones are the most severe, so they can be addressed first.
Ranking each risks by in regarding the possibility of happening and the potential
harm.
Tolerable risk
Intolerable risk
Low risk
Medium risk
High risk

9. Treat the risk
Risk Treatment is the process of selecting and implementing of measures
to modify risk.
Risk treatment measures can include;
Avoidance (unwanted –ve consequences)
Acceptance (wanted and +ve consequences)
Optimizing (occurrence and severity)
Transferring (organization is not responsible)

10. Monitor the risk
Risk monitoring is a crucial step where companies measure and review the efficiency
of their risk strategies.
Monitoring can help to ascertain whether proper policies were followed, whether
new risks can now be identified or whether previous assumptions to do with these
risks are still valid. Monitoring is vital because risk is not static.

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